Commercial policy

This was highlighted by Commissioner Ashton during the EU- China talks. EU Trade Commissioner Catherine Ashton and Chinese Vice- Premier Wang Qishan stressed at the Second meeting of the EU- China High level Trade and Economic Dialogue (HED) the necessity of economic openness in order to tackle the financial and economic crisis. The Dialogue which took place between 7/8 of May, included a discussion on ‘trade, investment and competition; small and medium-sized companies; customs cooperation; sustainable development including low carbon economy; energy; food safety and trade in food, consumer protection and product safety; healthcare; innovation and intellectual property rights; geographical indications; technology and information society; and transport.’. Both China and the EU delegation supported growth and trade opportunities for Small and Medium-sized Enterprises (SMEs).

Source: European Commission Audiovisual Service

After taking on mobile operators on roaming rates the Commissioner for information Society and Communication Viviane Reding has decided to tackle the issue of cross boarder text messages. Today the cost of a message sent abroad can be up to 20 times higher than a message send at home. That extra cost has no technical justification and is therefore not legitimate according to the Commissionner who even speaks of “exploitation” of the consumer. The Luxembourger Commissioner threatens to regulate the prices of SMS if the companies do not choose to do it themselves before July 1st 2008. Although this may benefit a small number of people, it will have a visible impact especially for the younger generation which is very fond of text messaging. It may not be enough to rekindle the citizen’s lost love for Europe, but it certainly won’t hurt.

Ukraine should become a member of the WTO in 2008 thanks in part to the backing of the EU. The Ukrainian deputy Prime Minister and Trade Commisioner Peter Mandelson sealed a deal in London last week allowing for the European endorsement . The accession of Ukraine should be adopted in a vote involving WTO members on February 5th. Ukraine is the third largest state to remain outside of the WTO (Iran and Russia being the largest ones) and a very significant partner for the EU. 42% of Ukraine imports come from the 27 member States and a quarter of its exports are EU bound. This could be a very significant political success for the pro-western coalition in power led by Ioulia Timochenko and will have an impact on Russia’s accession process. Moscow will have to get the assent of all WTO members including Ukraine to finalise its own accession. For once Kiev could have the upper hand and dictate its conditions, which is bound to irritate the Kremlin… It is up to the Ukrainians to make the best of the situation and help appeasing the tensions that have been straining the neighbours’ relations over the last couple of years.

Those were the words of Congolese economy professor, Aime Mianzenza when criticising the new EU-Africa trade deals proposed by the EU at an EU-Africa summit last December in Lisbon. They outline the duty-free terms for most imports coming from the poor continent to the south. The condition of the EU proposal was that African countries would gradually open up their markets to competition, which led many African countries to turn it down. At the core of the debate lies a longstanding controversy in international trade policy: at what point in the course of economic development does competition benefit a poor developing country. Some argue that the African refusal to open up their markets is a token of sheer protectionism that in the longer run undermines their own economic growth. Others argue that the EU and the US are leading a campaign of equally crude protectionism in the name of trade liberalism spearheaded by the WTO. A campaign that, if successful, would see European subsidised agricultural products flood the African markets and destroy their home economy. The truth probably lies somewhere in between.

Yes, politics is complicated. You have a supposedly left-wing Gordon Brown government stressing the importance of trade liberalisation and bringing down borders in the UK. At the same time you have a right-wing government in France led by President Mr. Nicolas Sarkozy, who does not miss out on any opportunity to advocate that good old economic protectionism vis-à-vis the world; a protectionism that Europe has historically and internally mastered to perfection. Speaking in the European Parliament Tuesday, Mr. Sarkozy took on another round of shadow-boxing with Mr. Brown, when he claimed that “if others defend their farmers, why shouldn’t Europe defend its farmers?" Two days later in Bruges, the UK Foreign Secretary punched back stating that “the case against economic protectionism is overwhelming”. One thing is for sure. The political entertainment is guaranteed for years to come.